Understanding FDI in multi-brand retail

New Delhi:  The Cabinet Committee on Economic Affairs on Friday cleared 51 per cent foreign direct investment in multi-brand retail.

FDI norms made easy:

1. Retail sales outlets may be set up in those states that have agreed or will agree in future to allow FDI in multi-brand retail under this policy. The establishment of the retail sales outlets will be in compliance of applicable state laws/regulations, such as the Shops and Establishments Act etc.
2. Retail sales outlets may be set up only in cities with a population of more than 10 lakh as per 2011 Census and may also cover an area of 10 km around the municipal/urban agglomeration limits of such cities.
3. Retail locations will be restricted to conforming areas as per the master/zonal plans of the concerned cities and provision will be made for requisite facilities such as transport connectivity and parking.
4. In states or union territories not having cities with population of more than 10 lakh as per 2011 Census, retail sales outlets may be set up in the cities of their choice, preferably the largest city and may also cover an area of 10 km around the municipal/urban agglomeration limits of such cities. The locations of such outlets will be restricted to conforming areas, as per the Master/Zonal Plans of the concerned cities and provision will be made for requisite facilities such as transport connectivity and parking.
5. At least 50 per cent of total FDI brought in shall be invested in ‘back-end infrastructure’ within three years of the induction of FDI, where ‘back-end infrastructure’ will include capital expenditure on all activities, excluding that on front-end units. For instance, back-end infrastructure will include investment made towards processing, manufacturing, distribution, design improvement, quality control, packaging, logistics, storage, ware-house, agriculture market produce infrastructure etc. Expenditure on land cost and rentals, if any, will not be counted for purposes of backend infrastructure.
6. A high-level group under the Minister of Consumer Affairs may be constituted to examine various issues concerning internal trade and make recommendations for internal trade reforms.